Microsoft Found To Conduct the Most Software Licensing Audits

Microsoft is the one software vendor that's most likely to audit companies on their software licensing compliance, according to an industry-sponsored survey.

The report, "2012 Key Trends in Software Pricing and Licensing Survey," available here, was conducted on behalf of Flexera Software by analyst and consulting firm IDC. Flexera produces "application usage management" software, including software licensing management solutions. The survey included 334 respondents, with more than half (54 percent) working at enterprises with $1 billion or more in revenues. About half (45 percent) of respondents were located in the United States, with the rest in Europe and Australia.

The larger commercial software vendors were more likely than other software companies conduct compliance audits, according to the survey. However, Microsoft led the pack in the study with the most frequent audits. Over the last year, respondents said they had been most frequently audited by Microsoft (51 percent), Oracle (27 percent), IBM (24 percent), SAP (22 percent) and Adobe (19 percent).

The study found that 64 percent of enterprises were audited, or had a license review, over the past 18 months to 24 months. More than a third (36 percent) underwent at least two audits in that time period. Companies audited more than three times in that period represented 10 percent of the survey results.

The companies most targeted for software compliance audits, according to the survey, were large enterprises, or entities with more than $1 billion in revenue. These companies reported that they were "dissatisfied" with their method of tracking software licensing at more than twice the rate of other companies in the survey. Just 35 percent of respondents indicated that they were "satisfied" or "very satisfied" with their tracking method.

A key reason for the respondent's dissatisfaction was a failure to track "overused" applications, meaning that software use was out of compliance with the contract. There were 38 percent of enterprises that said that "11% or more of their application spend is associated with applications that are overused," according to the study.

Plenty of money is on the line with these software licensing compliance audits. Company "true ups," in which companies pay for the software used by employees over a licensing period, were more than $100,000 over the last year for over half of the respondents. More than a third (36 percent) of respondents had a true up of $300,000 or more. About a fourth (24 percent) indicated a true up of $1 million or more.

The report recommended that organizations stay proactive about tracking their software assets. Stumbling blocks that companies typically face include complex licensing agreements, complex IT environments, decentralized operations and a lack of automation.